The Inside Scoop Of Home Warranties

The Inside Scoop Of Home Warranties

When it comes to buying a home, a buyer has a plethora of information to consider and process.  There are so many decisions that need to be made during the home buying process that are sometimes overlooked.  One of those decisions that needs to be discussed by purchasing parties, is whether or not to purchase a home warranty.  

To begin, it is important to understand what a home warranty is and the purpose it serves.  A warranty is somewhat like an insurance policy, however it only covers specific components of the home.  A home warranty is a contract between a homeowner and a home warranty company that provides for discounted repair and replacement service on a home's major components, such as the furnace, air conditioning, plumbing and electrical system.   A home warranty company may also offer additional products that cover major appliances such as washers, dryers, and refrigerators. 

How much is it?
  When buying a home, there are numerous opportunities to purchase additional items.  When it comes to a home warranty, these products typically cost a few hundred dollars a year, normally between $300-400, with the option to add additional coverage.  

Why get one?
  The idea behind purchasing a home warranty is to provide a buffer in the event of needing repairs on some of the larger appliances in a home, such as the refrigerator and the furnace.  In fact, 7 out 10 homes have a home system or appliance that will fail during the course of one year.  Depending on the home warranty that you purchase, typically the individual just pays the service visit versus the cost of the repairs themselves.  This can save a homebuyer thousands of dollars.   In summary, a home warranty can prevent a new homebuyer from unforeseen major expenses.  This is especially valuable for first time homebuyers.  

How to get one?
  The most obvious way is to contact a home warranty company and purchase through them if you are buying a home.  A creative way to get one would be to have your buyer’s agent, include it in the purchase offer.   They would request that the seller pays for a 1 year home warranty, depending on the situation you may ask for more than 1 year, to be paid at the seller’s expense.   All in all, home warranties can be valuable and a real money saver for a homebuyer.  However make sure that you are getting the items covered in your home when you purchase one and that they are fully covered by the warranty that you purchase.  

Michael Kane is a Broker Associate at Keller Williams. He is a member of the Carr Peck & Associates team that is recognized locally and nationally as in expert in real estate. Locally he is a member of the Denver Metro Association of Realtors.  Nothing brings him more joy than making his client’s dreams become a reality!  For more information feel free to contact him or call 303-717-9284.

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Dated: August 11th 2014
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